The Global Trade Research Initiative (GTRI) has warned that a newly introduced US Senate bill—the Halting International Relocation of Employment (HIRE) Act—could severely disrupt India’s export-led IT, BPO and Global Capability Centre (GCC) industry. Table d in Washington on 13 November and publicised in India on 14 November, the legislation seeks to impose a 25 percent tax on payments for offshore services.
Roughly 60 percent of India’s IT revenue originates from US clients. Analysts estimate that the surcharge would raise American buyers’ costs by 15-18 percent once currency effects are factored in, forcing contract renegotiations or relocation of work back onshore. Large firms such as TCS and Infosys have already diversified near-shore centres in Mexico and Canada but still rely heavily on India for skilled talent.
![Proposed US 25 % Outsourcing Tax Poses New Risk for India’s $280 bn IT Sector]()
From a mobility standpoint, the bill could curtail H-1B deployments and short-term B-1 visits, as US companies weigh political optics against cost savings. Indian professionals on intra-company transfers may face curtailed project timelines if client budgets shrink. HR teams should scenario-plan for redeployments to alternative markets and consider expanding EU delivery hubs, which currently face no similar levy.
GTRI suggests a bilateral dialogue to exempt services tied to critical digital infrastructure, arguing that the tax could hurt US competitiveness. India’s commerce ministry is expected to raise the issue at the Trade Policy Forum in December.
Roughly 60 percent of India’s IT revenue originates from US clients. Analysts estimate that the surcharge would raise American buyers’ costs by 15-18 percent once currency effects are factored in, forcing contract renegotiations or relocation of work back onshore. Large firms such as TCS and Infosys have already diversified near-shore centres in Mexico and Canada but still rely heavily on India for skilled talent.
From a mobility standpoint, the bill could curtail H-1B deployments and short-term B-1 visits, as US companies weigh political optics against cost savings. Indian professionals on intra-company transfers may face curtailed project timelines if client budgets shrink. HR teams should scenario-plan for redeployments to alternative markets and consider expanding EU delivery hubs, which currently face no similar levy.
GTRI suggests a bilateral dialogue to exempt services tied to critical digital infrastructure, arguing that the tax could hurt US competitiveness. India’s commerce ministry is expected to raise the issue at the Trade Policy Forum in December.
